Sunday, 19 April 2015

$2,998,158 My Net Worth Update April 19, 2015

My Net Worth Update April 2015

    April 19 / 2015  : Updated every mid month


 -Primary Home
 2015 assessed value  $1,253,000
  $500,000 mortgage at 3.35%                    Equity Total:               $753,000
-New Buliding Lot for new home 
Purchased for $560,000
6000 sqft building lot 2015 assessed value           Total:                $648,700

-Commercial Rental Property
Warehouse 2300 sqft Income Property 2015 assessed value
                                                                               Total:                 $319,000
 -Residential Rental Property
Rental Home 3200 sqft Income property 2015 assessed value
                                                                               Total:                 $667,000

-Start Up Company
Brewery start up share value
                                                                               Total:                   $85,000

-Equity Investments
Tax free saving account TFSA -                 $42,649
Retirement saving plan RSP -                  $141,272
Canadian margin account -                      $134,832
US margin account ( Ex Rate 1.222)-      $192,567
                                                                   Equity   Total:                 $511,320

Checking account                                         $2,306
Business account                                        $11,832
                                                                               Total:                   $14,138


                         January 2015 Grand Total Net Worth:      $2,998,158

                                                Gain/loss from last month +$104,860

Mar.   2015  :$2,893,298 Details Link      -$3,307
Feb.   2015  : $2,896,605 Details Link +$725,060
Jan.    2015  : $2,171,545 Details Link   +$44,214

Dec.   2014  : $2,127,331 Details Link    -$33,547
Nov.   2014  : $2,160,878 Details Link  +$49,867
Oct.     2014 : $2,111,011 Details Link  - $28,473
Sept.   2014 : $2,139,484 Details Link + $13,390
Aug.    2014: $2,126,094 Details Link  + $14,613
July    2014  : $2,111,481 Details Link   + $5,584
June    2014 : $2,105,897 Details Link   + $3,165
May    2014 : $2,102,732 Details Link

In Summary-

  Lots going on this month. First and foremost I have purchased a new home. It is an old 1930,s home that's 2 bedroom and one bath. Its in rough shape and prime for a tear down for a new home build in which I am in the process of doing. This month has been monster with a $104,860 gain. $88,700 has been from this new home purchase as I bought it far under value. the rest of the $16,160 has been from portfolio increases, stock dividends , options premiums and rental income. So close to breaking 3 million which I did not realize it. Maybe next month.

I was house hunting for quite a while and this place kind of fell on my lap. My friend secured the lot last year and was going to build but certain issues came up for him and he couldn't close on the place and he offered it to me as he owes me a few favors as I have lent him money in the past interest free. We did a handshake deal at that was that. Closing costs (taxes, lawyer) were a smidge under 10k so basically I am all in for 560k. At 560k the place is a steal as assessed value is 648k and probably real current market value at about 620-635k. I could flip the place right now and clear 40-50k after selling costs. That of course would be subject to capital gains.

Now I am in a conundrum. I am holding too much real estate 2.38 million worth to be exact. I actually hate real estate. I hate dealing with the hassle. To tell you the truth I rather just hold REITS (Real Estate Investment Trusts) instead. So the plan now is to fix up my home a little bit and put it on the market in next couple months. Also I will be putting up my 2300 sqft warehouse for sale in the next few weeks but I am worried the market is very slow for it as I had it listed two separate times with no bites. My final residential 3200 sft rental property I plan on getting rid of too but not until next year.

Reason for selling everything but my primary is that I like to be liquid. I rather have a monster income equity portfolio worth 1.7 million filled with Reits, MLP,s , preferred shares and high yielding stocks yielding an average of 6% that will rake in $102k or $8500/month before taxes that is far more tax efficient than investment hard real estate income and much more worry free. Also it will be a much safe diversified choice.

I should also walk away with a pretty penny after my home sells. I expect to walk away with $1,325,000-1,375,000 once it sells as I have been studying the market for quite some time. The new home cost me $560,000 plus building costs which I have estimated to be around $540,000-$590,000 at the most which puts total cost at about $1,100,000-$1,150,000. So I should be walking away with about $175,000-$275,000. Also the new home value once completed will be worth based on new home comparables in the area of around $1,475,000-$1,575,000. A potential 350k profit is something I don't mind moving my family around for lol.

If all goes to plan I will live in this new home for a couple years and sell it to cash in and start the process over again. I used fairly conservative numbers as I know nothing in real estate usually goes according to the plan. I did not take in account carrying costs of any kind or dips in the market. Very possible I could be carrying close to a million dollars in loans before my current home sells which would equate to 30k a year which will eat into profits. Yes huge profits (20-30%returns) are to be made developing homes for sale but they also carry many risks.

To finance the new build of 540-590k I have to come up with some money. I have a few options right now.

1. Sell all my stock.  I really don't want to do as I am getting good money from the dividends and options premiums. I will be using some of my margin equity out of my stocks but I have to be careful especially if I am playing options.

2. Sell some property. I am going to list my home and warehouse soon so hopefully I can time it right. Downfall is that I might have to rent a new place for a few months which I hate the idea of especially for the kids sake.

3. Private Loans. I have a few people that offered money at certain interest rates 4-6%. Right now its a good option but I dont know if I can get more than 300k from them.

4. Get more conventional loans. This is my last resort right now. The amount of hoops I had to jump through to get my current 500k loan was such a headache that I never want to go through it again. Plus their rates are only slightly better than private loans. Also you have to worry about closing costs on mortgages that boost their total costs even more.

I will probably wind up doing a combination of most of these options going forward. Right now I got 200k lined up in a private loan for the start of construction.

                  Here is me working on one of the many revision sketches of the upstairs floor plan

In other news

The brewery hit a few snags with the equipment not working properly and is in the process of getting fixed. It has pushed opening date back a month to May. I haven't been to involved lately with it but I will more so going forward.

In family news my nephew that is staying with us is doing alright. He struggles with homework, school, puberty but we are doing are best. Its a challenge and has increased stress at home accordingly. His mom seems to be getting some help with her drug addiction and seems to be going in the right direction but you never know with these things. Still no definite on how long we will care for him. Until then we treat him like one of our own.

I know my posts have slowed quite a bit but I have just been so busy lately but worry not I will continue updating things. Till the next post. Good day and Grind on!